By Avrum Lapin,  President of The Lapin Group, LLC.

Members of Generation X have begun to turn 50 this year, and with that, the philanthropic landscape is in transition. These men and women (born 1965-1980) focus on making something happen, creating change in their communities and supporting organizations and causes that make a difference. They bring an entrepreneurial approach to giving and have different expectations of the groups they support and the people who govern and operate them.

Understanding Gen X donors:

• Despite weathering the hardest hit of any cohort to net household worth during the Great Recession, according to Business Insider, Generation X continues to be deeply charitable.
• The post-recession median income of Generation X’ers (Ages 35-49), according to a recent report from the Pew Research Center, now far outstrips that of any other cohort. That, together with the general trends of Gen X’ers, creates a strong platform for giving.

Nearly 30% of Gen X’ers provide volunteer leadership to some nonprofit, according to a study from the Corporation for National and Community Service, and, according to the same research, people who volunteer are twice as likely to give than those who do not.

Forming Relationships with Nonprofits: Other areas of our lives, especially work, close in social circles and philanthropy are increasingly interconnected. Gen X’ers charitable choices reflect that and are being driven by peer-peer relationships and in work-related settings. Emerging major donors in this age group (35-50) do not often settle into a relationship with a charity for life, unlike their Baby Boomer parents.

The ROI of Giving: The strength of the philanthropic appeal is on the “selling proposition,” the tool formerly known as the “case for giving.” Decisions regarding charitable giving are increasingly based on a more determined level of due diligence and a calculus of relationship and personal advancement. According to Blackbaud, nearly 40% of Gen X donors say that visiting an organization’s website is an important factor.

Giving today is more transactional and less transformative. The metric is most often results, and the capability of the nonprofit to manage and generate results, rather than adding to the common good and providing value in often intangible ways. Further, philanthropists are more likely to support projects, not causes, sometimes missing the mark of meeting the greatest need.

Peter Buffett, in “The Charitable Industrial Complex,” a widely read Op-ed in The New York Times in July 2013, summed it up in this way: “Early on in our philanthropic journey, my wife and I became aware of something I started to call Philanthropic Colonialism. I noticed that a donor had the urge to ‘save the day’ in some fashion. People (including me) who had very little knowledge of a particular place would think that they could solve a local problem.”

He went on to say, echoing my point above, “with more business-minded folks getting into the act, business principles are trumpeted as an important element to add to the philanthropic sector. I now hear people ask, ‘what’s the R.O.I.?’ when it comes to alleviating human suffering, as if return on investment were the only measure of success.”

Now, we all agree that clarity of mission and purpose, together with good governance and leadership, are key to engaged philanthropy and successful campaigns. I am not adverse to, in fact wholeheartedly endorse, effective business practices and business planning as part of nonprofit administration today. But the emphasis should not only be on the bottom line, but on what the bottom line accomplishes.

How to Engage Gen X donors and leaders:

• Shed the “old rules” of demanding fealty and Board membership as a requirement of leadership. Focus instead on creating opportunities for a transformative philanthropic and organizational experience.
• Show the nexus between giving to make something happen, leadership to inspire others, and recognition for personal satisfaction.
• Make business planning a part of what your nonprofit does, and don’t see it as a burden, but a dynamic framework for success.
• Demonstrate R.O.I., but do it in the context of guiding the donor toward a passionate act. If it is merely a transaction, then nobody wins. The donor will ultimately lose interest and he or she will surely move on to the next opportunity.

We talk about engaged philanthropy, making a difference and generating results, focusing on the problem, not the “solution du jour,” and making people feel essential. Doing that will undoubtedly yield success, continuity, and growth.

We welcome your comments and insights. Let us know what you think.

Avrum Lapin is President at The Lapin Group, LLC, a full service fundraising and management consulting firm for nonprofits in Jenkintown, Pennsylvania, outside of Philadelphia. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading edge approaches and strategies. Avrum is a frequent contributor to eJewishphilanthropy.com and speaker in the US and overseas on opportunities and challenges in today’s nonprofit marketplace.

Visit The Lapin Group at www.thelapingroup.com.